Wednesday, July 14, 2010

You Need to Be Able to Take Care of Yourself

If you read the above headline, you probably thought duh, that's what this whole blog is about so why remind us... The reason is that I have been in more than a half dozen meetings over the past week. These have been Board/Council meetings for government entities, NGOs, social service agencies, and businesses large and small. The main topic at ALL of these meetings, especially those that rely on any sort of government funding/taxes/etc, is that many of these organizations are literally running out of money. I've sat through budget meetings for decades and aside from small blips, there was always more money coming down the pike. Entities could pretty much count on having a stable source of funding on which to base their budgets and five year projections were almost always on the positive side with income climbing nicely, right along side the growth in expenditures (especially the cost of labor and benefits). During the '70s there were, of course, some segments which had varying degrees of financial meltdown (especially in Texas if I remember correctly), however in my memory I have never seen this type of across the board, everyone is damn near out of money, situation. Scary.So as I sat in today's meeting with a bunch of government types who were wringing their hands over their next fiscal year budget that has more holes in it than Swiss cheese, it made me wonder how close to financial devastation the American people think we are. For many people, there has always been some savior whether it was a government program, a corporate "bail out" or bankruptcy followed quickly by new offers from credit card and mortgage companies. My admittedly foggy but often accurate crystal ball tells me that the next few years will be unlike anything most of us (those who remember the Great Depression notwithstanding) have ever had to deal with.So what do you do when your town, city, state, federal government, collection of social service agencies, school district, hospital, police department, and any other number of agencies/businesses that you rely on daily, are of the verge of financial collapse?Basically your guess is as good as mine but I have some ideas about how I will be preparing:

Fewer police on the street due a decline in tax revenue which leads to budget cuts means that I may not be able to call the police when I need them (or they may not show up as quickly as I need them to) which means I will need to be able to protect my home and family. This doesn't just mean being armed. It also means taking home security seriously, avoiding problem areas/problem people/problem situations, and making myself and my family a "least likely target".

For my income, diversification is the key. This means not only diversification with local clients but extending my business tentacles across the US AND across the world. Unless you offer a service that is required to be local (ie: you are a plumber) then competition for your job and for the money you could be earning is not just competition from local people but from highly skilled, highly educated people from anywhere in the world. Outsourcing, in sourcing...your economy is not just local anymore, it is global.

Multiple streams of income is the corollary to the point above. Live it, learn it, love it.

I use cash only and don't carry debt. When TS could hit TF at any time, it is best to be in as flexible a position as possible. Having cash, using cash, and not being saddled by debt is one way to do this.

I don't rely on government programs. Period. My granddad taught me this and my mother reinforced the lesson when as a single mother, she would work two or three jobs instead of taking a penny of welfare. When you rely on others (whether it be a government welfare check or an alimony check), the support could be pulled at any minute and you would be left with nothing. When you are the master of your own destiny, this doesn't happen.

Our needs are minimal. I like nice things and I buy nice things but if my income was suddenly reduced to a fraction of what I make now, then we would just ratchet back our expenditures as needed. The less you want and need, the better off you are during uncertain times.

I don't plan to use Social Security as my retirement plan. It will be a nice bonus if it happens to be available when I retire but my assets are diversified (there's that word again) and I plan to fund my own retirement when the time comes.

Building a social network is worth the time and effort. When I need something, whether it be news, information, or a hand with a project, I rely on my network of friends and family before I look elsewhere. Building these networks now may pay off quite well in an uncertain future.

I know where to look for the material goods I need. First stop would be the garage which has quite a stockpile of stuff (food, water, disposable goods) but I also know where to look for water (stored in the garage, the rain barrel, a near by stream, etc), food (besides the freezer, we have a garden, I know all of the wild food sources within a 10 mile radius, and if necessary I can hunt and fish), and anything else we may need (store, thrift store, garage sales, dumpster dive, make it myself, etc). Acquiring the stuff you need is a part of life. Being creative about how you acquire it...priceless.

Medical and dental care is a necessary part of life. Besides having insurance, should this go away for some reason, I have friends who are doctors, dentists, and specialists; I have a bit of skill in the medical field so I can take care of most small problems myself, and first and foremost, I try to maintain and improve my health with exercise and nutritious food so that hopefully I won't need to use the medical system much.

I continue to learn. Things change fast. Sometimes on a daily basis. There are always new options for communications, new technology, and new information to learn which can be extremely beneficial. Continuing to learn, and continuing to adjust your course based on the latest information, is something everyone should do.

The bottom line--my plan is to be able to do as much as possible for myself and my family, live as minimally as possible, and be able to respond in as flexible manner as possible (both in attitude and physically) no matter what happens. I'm hoping you will do the same. If everyone did this, our economic condition would improve overnight.

6 comments:

Your comment about the social network is big. How many people don't know any of their neighbors? Don't attend school functions? Don't go to church? Any or all of these can be missed opportunities to expand your circle of acquaintances, and possible help when needed. Or someone who "knows someone" who can do/supply what you're looking for. Or to BE the helper. Never underestimate the value of paying it forward. Gratitude can be a powerful asset.

What do you do when you are someone like myself? I'm a second year law student, who is working part time, but getting most of the money I need for school from loans. How does one prepare on such a limited budget? I borrow the least I can to subsist on, and do my best to maximize the dollars I do have.

I have few assets with which to invest, being only 24 I haven't acquired many, and I want to do more to prepare for the worst then just purchase BOB items at the Dollar store and hope for the best. I'm an economics undergraduate, so I have an understanding of what we are facing, and I am none-too-positive for the short and longer terms (5 years).

Any suggestions or recommendations on how I can maximize my preparedness without breaking the bank?

Ryan, The best preperation you can do with limited resources is to prepare yourself. Brush up on your survival skills, learn other useful skills, keep up your netowrk or friends or family that can help you durring difficult times, keep yourself in excellent health and physically fit, and learn to survive with as few things as possible (which it sounds like you are). In many all-out disaster situations, you may only be left with the clothes on your back and the knowledge in your head, notthe huge stokpile of food and gear you have amassed. I would be a bit concerned about big law school loans with the current economic outlook for lawyer jobs but if you are excellent at your job and creative with your skills you should be fine.